Mark Weaden
Financial giants Mastercard seek to buy blockchain analytics startup CipherTrace as they expand their reach into the crypto space
Mastercard has been making waves in the cryptocurrency industry this year, now moving to purchase a cryptocurrency intelligence and analytics company. The goal of CipherTrace is to help businesses manage security and fraud related to the world of digital assets.
While the deal hasn’t been disclosed publicly, it does look to be going ahead. Mastercard already has the foundations to provide this kind of service. But, since 1966 the company has been operating with fiat currencies, rather than digital assets. The deal cements the financial giant’s intentions and outlook on cryptocurrency.
What is CipherTrace?
The company was founded back in 2015 before cryptocurrency started to gain global media attention, with the goal of providing research analytics regarding the movement of digital assets. The company was initially funded by the U.S. government but then took on funding rounds from many private firms as well.
CipherTrace is a relatively low-key company but does boast some 150 customers worldwide. These include major banks, cryptocurrency exchanges, as well as modern crypto agencies. You may have heard of Chainalysis, which set a $4bn valuation earlier this year.
What will CipherTrace do for Mastercard?
CipherTrace’s analytics will help to provide anti-laundering services to Mastercard, which will be integral to Mastercard customers as fiat currency moves digital. A quote from Mastercards top brass said that the deal gives Mastercard the ability to “differentiate its card and real-time payments infrastructure”, which will mean customers can use their cards within the regulations set by the state.
While many media outlets purport cryptocurrency as a safe haven for criminal activity, all transactions made on the blockchain are recorded. With the analytical technology on offer at CipherTrace, we are starting to see how the industry will eventually unfold—with sophisticated analytics, tracking malpractice and any criminality.
Not only will it directly benefit Mastercard and its customers, but it will help law enforcement to seek out criminal activity and bring those accountable to justice. We have already seen these kinds of moves from spearhead fintech companies like PayPal and Square. But, with the kinds of resources and capital Mastercard has, they can quickly catch up.
Mastercard has shown a clear interest in cryptocurrency and is clearly excited about the future of the industry. Deals with major U.S. crypto exchange Gemini, as well as companies like Uphold and BitPay, show that they are committed.
